AP11-6 (Equity transactions) Southern Exposure Ltd. begins ope shareholders' equity rations on January 2, 2016. During the year, the following transactions affec ration authorizes the issuance of 1 million common shares, and the 1. Southern E xposure's articles of incorpo issuance of 100,000 preferred shares, which pay an annual dividend of $2 per s 2. A total of 240,000 common shares are issued for $5 a share. 3. A total of 15,000 preferred shares are issued for $14 per share. 4. The full annual dividend on the preferred shares is declared. 5. The dividend on the preferred shares is paid. 6. A dividend of $0.10 per share is declared on the common shares but is not yet paid 7. The company has net income of $150,000 for the year. (Assume sales of $750,000 and total operatin expenses of $600,000.) 8. The dividends on the common shares are paid. . The closing entry for the dividends declared accounts is prepared. a. Prepare journal entries to record the above transactions, including the closing entries for net income and Required: dividends declared mentioned in items 3 through 6 above. b. Prepare th c. Why would an investor choose to purchase the common shares rather than the preferred shares? Or vice versa? e shareholders' equity section of the statement of financial position as at December 31, 2016